Tips on : Owning a franchise store.
You become a partner in the business
which gives credibility. It will also provide you with support and training.
Go for franchises that provide you with inventory and equipment. Take
part in a training program. Once this is completed you will need to
do some additional training on-site.
You are paying for the copyright to use the reputation of the franchisor.
You are essentially working for that franchisor to send more profits back
to their headquarters. The franchisor makes more dosh when you do. You
should therefore be able to buy inventory and equipment from them at a
discount; it's only fair.
Beware: Many franchisors have giant startup
fees, royalties and yearly fees. Once the inner workings
of the franchisor is known you may not be keen to go further with them.
However, some businesses do not just further their business and the profits
but also to educate potential franchisees about the positive and negative
points about owning one of their concessions.
Be careful of the agrement that you might get locked into. Be aware
that the average agreement length for a franchise store is usually 15-20
twenty years. This is like a life sentence(!) It could be very difficult
to get out of if you were having trouble getting the business off
the ground. Consider also there may be hefty breach-of-contract
fees as well if your wee business does not do as well as projected and
fails a few years after it starts.
The bestter franchisors offer ongoing support for their franchisees.
If you have a problem then their headquarters should be the place you turn
to. Theu should have a solution or be able to point you in the direction
you should go.
Location. This a most important consideration. If passing
trade is important in your franchise store, you need to consider where
you're going to put it. You should also find out what the local council
or government is up to in that area; sometimes development can be good,
sometimes it means you have to sell up and move on.
Profitability: Are you going to be able to make a fat net
profit at the end of the financial year? If the answer is no, or maybe,
re-think the business you're getting into.
Compatability: Do you have a knack for this trade? Would you
enjoy doing it twelve hours a day? Have you worked in it in a small way
before? An ideal way to learn about the business would be to take a
job in a franchise in the next town and see how it works. If you do
this, keep quiet about your long-term intentions. You don't want anyone
pinching your idea.
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